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http://hdl.handle.net/10419/31949

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Language

dc.contributor.author

Vieira, Carlos

en_US

dc.contributor.author

Vieira, Isabel

en_US

dc.contributor.author

Costa, Sofia

en_US

dc.date.accessioned

2005-03-03

en_US

dc.date.accessioned

2010-05-14T11:52:55Z

-

dc.date.available

2010-05-14T11:52:55Z

-

dc.date.issued

2003

en_US

dc.identifier.uri

http://hdl.handle.net/10419/31949

-

dc.description.abstract

The coexistence in EMU of one common monetary policy and several domestic fiscal policies raises a number of problems of both academic and political interest. First, there are reasons to assess a hypothetical need to also centralise fiscal policies in such circumstances, according to what prevails in federal states. Second, given that this hypothesis has not reached consensus in the EU, nor is it expected to do so in the near future, the issue of how to co-ordinate monetary and fiscal policies, in order to achieve the desired outcomes in both global and individual terms, arises. Third, the fact that policy spill-overs are enhanced in the EMU, the need to avoid free riding behaviour on the part of member states and the apparent non-reliance on financial markets to discipline sovereign debtors led to the option of restricting the autonomy of domestic fiscal policies by setting up constraints upon the relative levels of deficits and debts. Due to these restrictions, it is important to investigate the existence of alternative options in case of economic shocks that are specific to an economic area, or that do not equally affect all EMU members. Theory suggests that financial markets, when integrated, can provide relief by supplying the means to finance recovery. However, the lack of integration, uncovered by empirical analyses especially in peripheral EU areas, indicates that financial markets cannot be fully relied upon as mechanisms of adjustment. The current study analyses these topics of interest for monetary and fiscal policies in EMU.

en_US

dc.language.iso

eng

en_US

dc.publisher

|aJean Monnet Centre of Excellence |cBerlin

en_US

dc.relation.ispartofseries

|aEzoneplus working paper / Eastward Enlargement of the Eurozone |x17F